When I meet with clients, I stress to them that estate planning mistakes can be costly, both in terms of time and money. Working with an experienced estate planning attorney is the best way to ensure that your estate plan is free from mistakes and works as intended. Allow me to explain some common estate planning mistakes and how to avoid making them.
- Failing to Create an Estate Plan. The most significant mistake you can make is failing to create an estate plan at all. Without a plan in place, Maryland intestate succession laws will dictate how your assets are distributed, which may not honor your wishes. You also miss the opportunity to decide who will make decisions for you if you become incapacitated, who will oversee the administration of your estate, and who will be appointed as your children’s guardian if one is ever needed. To avoid making this mistake you simply need to work with an experienced estate planning attorney to create a comprehensive estate plan that includes documents such as a Last Will and Testament, a trust agreement, a Power of Attorney, and a Living Will.
- Choosing the Wrong Personal Representative or Trustee. The Personal Representative of your Will or the Trustee of your trust serves a fiduciary role and plays a crucial role in carrying out your wishes. Unfortunately, many people make the mistake of choosing someone based on their relationship rather than their ability to handle the responsibilities. A Personal Representative or Trustee needs to be organized, detail-oriented, and capable of managing potentially complex financial and legal tasks. Instead of choosing a family member or friend based solely on the fact that you trust them, select someone who also has the skills and time to effectively manage the duties required. You may wish to consider someone who has significant accounting, business, or legal experience or even appointing a professional Trustee or Personal Representative to ensure your estate is managed properly and without unnecessary complications.
- Overlooking the Importance of Health Care Directives. Many people focus solely on asset distribution when creating an estate plan, overlooking the importance of health care directives. A Living Will and a Health Care Power of Attorney or Advance Directives should be considered essential components of a comprehensive estate plan. These documents ensure that your medical wishes are followed if you become incapacitated and cannot make or communicate decisions for yourself. Discuss your wishes with your chosen healthcare proxy and ensure they are willing and able to carry out your instructions. These conversations, though difficult, are crucial for ensuring that your wishes are respected during a medical crisis.
- Neglecting to Plan for Long-Term Care. Many people underestimate the cost of long-term care and assume that Medicare or their health insurance will cover it. Unfortunately, Medicare does not cover most long-term care expenses, which can quickly deplete your savings at an average cost of over $140,000.00 in the State of Maryland. Failing to plan for this can leave your estate vulnerable and burden your loved ones with the cost of your care. To prevent making this mistake, consider long-term care insurance or explore other options like Medicaid planning. Incorporating these into your estate plan can protect your assets and ensure that you receive the care you need without depleting your estate. An experienced estate planning attorney can help you understand your options and develop a plan that fits your needs.
- Not Updating Your Estate Plan Regularly. Creating an estate plan is a great first step, but it should not be a “set it and forget it” task. Life events such as marriage, divorce, the birth of a child, or the acquisition of significant assets can render parts of your estate plan outdated or ineffective. To avoid this mistake, review and update your estate plan regularly, particularly after major life events. Even if no significant changes occur, it is wise to revisit your plan every few years to ensure it still reflects your wishes and the current laws. Updating beneficiary designations on accounts such as life insurance policies and retirement accounts is equally important, as these designations supersede what is written in your Will.
Can We Help You Avoid Estate Planning Mistakes?
For more information, please contact our estate planning office in Owings Mills, Maryland by calling 410-654-3850 to schedule an appointment.
Attorney at Gershberg & Associates, LLC
Mr. Gershberg, an active member of his community, is well aware of the growing importance of estate planning, and dedicates himself to informing the public of the need for careful attention to their specific situations Read More!
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